Kinect sales continue to climb

As we expected, Microsoft is now confirming that the sales of Kinect have continued to climb, as the company has now confirmed that they have moved over 2.5 million units in the first 25 days of release worldwide. The latest increase in sales is said to have been fueled by much better availability of the Kinect add-on during Black Friday.

Retailers are pleased with the strong sales of Kinect, and a number of retailers have indicated that Kinect was a top sales performer during the Black Friday weekend. Retailers that we have spoken with suggest that Kinect will continue to have strong sales throughout the rest of the year, and it will be up to Microsoft to keep inventory coming so that the retailers are well stocked.

Small retailers and independent video game retailers are reporting to us that they have Kinect add-on units to sell, but it remains unclear if they will continue to get units from mainline distribution in the numbers that they need between now and Christmas. As one independent retailer told us, “We have them in stock now, but I can’t say that will be the case between now and the 24th. We do think demand for Kinect will continue to be high, however, as Microsoft has done a good job at promoting it.”

With over 2.5+ million units of Kinect already sold, it is looking much more realistic that prediction by Microsoft that they will be able to move 5 million units before the end of the year is likely. When the revised forecast of sales of 5 million units was announced by Microsoft, many analysts thought it was a pipe dream after such tight availability at launch; but now it does look as if retailers can help Microsoft achieve this number, provided that Microsoft can keep inventory on their shelves.

As for Kinect software sales, sources that we spoke with say that sales have been good and even a little better than they expected. One publishing source tells us, “Microsoft is selling Kinect product at a rate that is a bit better than we expected and it seems the attach rate for titles with Kinect is good, and Kinect titles are moving with each one sold.”

From the whispers that we have heard, the sales of Kinect have already started to get developers thinking about what might be possible with the device in the future. We believe it lead to more titles than perhaps were expected and this will be announced at E3 next year. A five million user installed base for Kinect is significant enough to drive additional development, according to analysts that we spoke with.